Appendix — Norfolk Shipbuilding & Drydock Corp. v. Faulk

‘ U.S. Department of Labor

Benefits Review Board

P.O. Box 37601

Washington, DC 20013-7601

BRB No. 98-1128

THEODORE FAULK

Claimant-Respondent

NORFOLK SHIPBUILDING AND

DRYDOCK CORPORATION

Self-Insured

Employer-Petitioner

NEWPORT NEWS SHIPBUILDING

AND DRY DOCK COMPANY

Self-Insured

Employer-Respondent

DIRECTOR, OFFICE OF WORKERS’

COMPENSATION PROGRAMS,

UNITED STATES DEPARTMENT

OF LABOR

Respondent

DECISION and ORDER

DATE ISSUED: May 17, 1999

Appeal of the Decision and Order of Daniel A. Sarno, Jr.,

Administrative Law Judge, United States Department of Labor.

Gary R. West (Patten, Wornom & Watkins, L.C.), Newport

News, Virginia, for claimant.

Gerard E.W. Voyer and Donna White Kearney (Taylor &

Walker, P.C.), Norfolk, Virginia. for Norfolk Shipbuilding and

Drydock Corporation.

Benjamin M. Mason (Mason & Mason, P.C.), Newport News,

Virginia, for Newport News Shipbuilding and Dry Dock

Company.

LuAnn B. Kressley (Henry L. Solano, Solicitor of Labor; Carol

DeDeo, Associate Solicitor), Washington, D.C., for the Director,

Office of Workers’ Compensation Programs, United States

Department of Labor.

Before: HALL, Chief Administrative Appeals Judge, SMITH

and BROWN, Administrative Appeals Judges.

PER CURIAM:

Norfolk Shipbuilding and Drydock Corporation

(Norfolk) appeals the Decision and Order (97-LHC-1216,

97-LHC-1496) of Administrative Law Judge Daniel A. Sarno,

Jr., rendered on a claim filed pursuant to the provisions of the

Longshore and Harbor Workers Compensation Act, as amended,

33 U.S.C. §901 et seg. (the Act). We must affirm the findings

of fact and conclusions of law of the administrative law judge if

they are rational, supported by substantial evidence, and in

accordance with law. O’Keeffee v. Smith, Hinchman & Grylls

Associates, Inc. , 380 U.S. 359 (1965); 33 U.S.C. §921(b)(3).

Claimant worked for Newport News Shipbuilding and

Dry Dock Company (Newport News) from 1973 until 1978, and

he was exposed to asbestos Owing this employment. Claimant

then worked for Norfolk from 1978 until 1996 as a shipfitter.

On November 27, 1996, Dr. Wilson diagnosed claimant with

peritoneal mesothelioma, and the parties stipulated that the

condition was caused, at least in part, by asbestos exposure. The

parties further stipulated that claimant is permanently totally

disabled due to the mesothelioma. Claimant filed claims for

compensation against both employers. By order dated April 30,

1997, the administrative law judge, agreeing that the cases

against both employers involved the same operative facts and

issues, entered an Order of Consolidation and Expedited

Hearing.

In his Decision and Order, the administrative law judge

found that because claimant’s last period of injurious exposure

to asbestos occurred during the course of his employment with

Norfolk in 1996, Norfolk is the responsible employer under the

Act, The administrative law judge awarded claimant permanent

total disability benefits of $426.72 per week from November 29,

1996, to the present and continuing, and medical benefits under

Section 7 of the Act, 33 U.S.C. §907. The administrative law

judge also awarded claimant interest. The administrative Jaw

judge further found that Norfolk is entitled to a credit for alt

third-party settlements entered into by claimant to date. Finally,

the administrative law judge found that Norfolk failed to

establish that claimant had a pre-existing permanent partial

disability that contributed to claimant’s total disability as

required by Section 8(1) of the Act, 33 U.S.C. §908(0; therefore

he denied Norfolk relief from the Special Fund.

On appeal, Norfolk challenges the administrative law

judge’s finding that it is the responsible employer and that it is

not entitled to Section 8(1) relief. Newport News responds,

urging affirmance of the administrative law judge’s finding that

Norfolk is the responsible employer based on application of the

last employer rule. The Director, Office of Workers’

Coinpensation Programs (Director), has responded, confining its

brief to the Section 8(f) issue. Claimant also has filed a response

brief, urging that the administrative law judge’s responsible

employer finding be affirmed.

After consideration of the evidence, we affirm the

administrative law judge’s responsible employer determination,

because his finding that claimant was last exposed to injurious

stimuli while employed with Norfolk and that it is thus the

responsible employer wider the Act is supported by substantial

evidence and in accordance with law. See O ‘Keefe, 380 U.S. at

339. The standard for determining the responsible employer or

carrier was enunciated in Travelers Insurance Co. v. Cardillo,

225 F.2d 137 (2d Cir.), cert. denied, 350 U.S. 913 (1955).

Pursuant to Cardillo, the last employer or carrier to expose the

employee to injurious stimuli prior to his awareness of his

occupational disease is liable for any compensation owed under

the Act. Accord Todd Shipyards Corp. v. Black, 717 F.2d 1280,

16 BRBS 13 (CRT) (9" Cir. 1983), cert. denied, 466 U.S. 937

(1984); see also Argonaut Insurance Co. v. Patterson, 846 F.2d

715, 21 BRBS 51 (CRT) (11" Cir 1988). A distinct aggravation

of an injury need not occur for an employer to be held liable as

the responsible employer; exposure to potentially injurious

stimuli is all that is required under the Cardillo standard. See

Lustig v. Todd Shipyards Corp., 20 BRBS 207 (1988), aff'd in

pert. part and rev'd in part sub nom. Lustig v. U.S. Depart. Of

Labor, 881 F.2d 593, 22 BRBS 159 (CRT)(9th Cir. 1989),

In the present case, the administrative law judge

concluded that claimant was last exposed to injurious stimuli

while working for Norfolk. In so finding, the administrative law

judge found claimant to be a very credible witness, noting that

claimant was candid about his lack of expertise in identifying

asbestos and only alleged exposure to asbestos when he was

certain of it. Claimant testified that, while he believed he may

have worked on many ships exposing him to asbestos at

Norfolk,'* he could recall only one incident of confirmed

exposure to asbestos, which occurred aboard the USS FLINT,

when pipe insulation ruptured in a particular compartment where

he worked; claimant testified he entered this area twice

following the rupture to pick up and return tools. Tr. At 64;

NNS Ex. | at 35-40. Claimant stated that he wore a respirator

on the day he learned of the presence of asbestos, but had not

been wearing a respirator at the time the rupture occurred. Tr, at

68. The administrative law judge further reasoned that the

credible testimony of Mr. Barrington, an industrial hygienist at

Newport News) generally buttresses claimant’s testimony that

he may have been exposed to asbestos at other times while

performing repair work at Norfolk on various Navy ships.

According to Mr. lIlarrington, based on the Naval Ship’s

Technical Manual, §633-10.8 (1st rev. May 15, 1986), ships

built prior to 1971 used asbestos for thermal insulation. Tr, at

93,96-97; NNS Ex. 4..Mr. Harrington confirmed that two of the

'2 Claimant recalled working on other U.S. Navy ships

which may have exposed him to asbestos. Claimant’s work

involved chipping and tearing out tile flooring, which he later

learned could have contained asbestos. He also worked around

other employees tearing out insulation and later learned it may

have contained asbestos.

ships on which claimant worked at Norfolk were built before

1971.

The evaluation of this evidence was within the

administrative law judge’s authority. As the fact finder, the

administrative law judge was entitled to conclude that claimant

was a credible witness. See Jones Stevedoring Co. v. Director,

OWCP ITaylor) ; 133 K3d 683, 31 BRBS 178 (CRT) (9th Cit.

1997). See also Avondale Industries, Inc. v. Director, OWCP,

977 F.2d 186, 26 BRBS 115 (CRT) (9" Cir. 1992). As the

administrative law judge rationally credited claimant’s

testimony and found it supported by other credible evidence, his

conclusion that claimant was exposed to asbestos during his

employment at Norfolk is supported by substantial evidence.

We reject Norfolk’s assertion that Port Portland y.

Director, OWCP, 932 F.2d 836, 24 BRBS 137 (CRT) (9th Cir.

1991), and Todd Pacific Shipyard v. Corp. v. Director, OWCP

[Picinich), 914 F.2d 1317, 24 BRBS 36 (CRT) (9th Cir. 1990),

require a showing that claimant’s exposure to asbestos actually

contributed to or aggravated his occupational disease. The court

in Port of Portland specifically rejected this contention, stating,

“[w]e agree with the Board that Cordero v. Triple A Machine

Shop, 580 F.2d 1331, 8 I3RBS 744 (9th Cri. 1978), cert. denied

440 U.S. 911(1979), does not require a demonstrated medical

causal relationship between claimant’s exposure and his

occupational disease.” Port of Portland 932 E.2d at 840,24

BRBS at 143 (CRT). The United States Court of Appeals for the

Fifth Circuit has held as well that regardless of the brevity of the -

exposure, if it has the potential to cause disease, it is considered

injurious. Fulks v. Avondale Shipyards, Inc., 637 F.2d 1008,

1012, 12 BRBS 973, 978(Stl Cir.), cert, denied, 454 U.S. 1080

(1981), cited in Avondale Industries, 977 F.2d at 190, 26 BRBS

at 113 (CRT); see also Lustig, 881 P.24 at $93, 22 BRBS at 139

(CRT).

In Susoeff v. The San Francisco Stevedoring Co., 19

BRBS 149 (1986), the Board addressed employer’s burden of

proof regarding causation and the determination of the

responsible employer. The Board held that once an employee

has established that he was exposed to injurious stimuli while

engaged in covered employment, that employer could escape

liability by showing that the employee’s injury is not work-

related or by establishing that he was exposed to injurious

stimuli while performing work covered under the Act for a

subsequent employer. /d. at 151. Accord Avondale Industries,

977 F.2d at 186, 26 BRBS at 113 (CRT); General Ship Service

v. Director, OWCP, 938 F.2d 960, 25 BRJ3S 22 (CRT) (9th Cir.

1991). See also Lins v. Ingalls Shipbuilding, Inc., 26 BRBS 62

(1992). Norfolk has not provided any evidence that claimant’s

injury is not work..related or that claimant was engaged in

subsequent covered employment. Moreover, Picinich does not

aid Norfolk, as in that case the employer produced evidence that

exposure was below levels considered injurious. Norfolk has not

produced such evidence her; and it bears the burden of proving

it as not the responsible employer. Accordingly, we affirm the

administrative law judge’s finding that Norfolk is the

responsible employer.

Norfolk next challenges the administrative law judge’s

denial of Section 8(f) relief. The administrative law judge denied

Norfolk’s request for relief pursuant to Section S(f), finding that

it failed to establish the contribution and pre-existing permanent

partial disability elements necessary for such relief to be granted.

The Director has responded, seeking affirmance of the

administrative law judge’s denial of Section 8(1) relief.

Section 8(t) shifts liability topsy compensation for

permanent disability or death after 104 weeks from an employer

to the Special Fund established in Section 44 of the Act. 33

U.S.C. § §908(0, 944. An employer may be panted Special Fund

relief, in a case where a claimant is permanently totally disabled,

if it establishes that the claimant had a manifest preexisting

permanent partial disability, and that his current permanent total

disability is not due solely to the subsequent work injury. See 33

U.S.C. §908(f)Q); Director, OWCP v. Luccitelli, 964 F2d. 1303,

26 BRBS I (CRT) (2d Cir.1992); Two “R” Drilling Co. v.

Director, OWCP, 894 F.2d 748, 23 BRBS 34 (CRT) (Sth Cir.

1990); John T. Clark & Son of Maryland vy. BRB., 622 F.2d 93,

12 BRBS 229(4th Cir. 1980). Thus, where an employee is

permanently totally disabled, an employer must demonstrate that

the total disability is caused by both the work injury and the pre-

existing condition in order to receive Section 8(f) relief. See

Director, OWCP v. Jaffee New York Decorating, 25 F.3d 1080,

28 BRBS 30 (CRT) (D.C. Cir. 1994); Dominey v. Arco Oil &

Gas Co., 30 BRBS 134 (1996).

In order to establish a pre-existing permanent partial

disability “[there must exist, as a result of [an] injury, some

serious, lasting physical problem.” Director, OWCP v. Belcher

Erectors 770 F.2d 1220, 1222, 17 BRBS 146, 149 (CRT)(D.C.

Cir. 1985); C & p Telephone co. v. Director, OWCP, 564 F.2d

503, 6 BRBS 399 (D.C. Cir. 1977). The only evidence of record

to support employer’s allegation is a September30, 1996 chest

x-ray, read by Dr. Can, showing “[s]ome linear atelectasis or

scarring.” NSC Ex. 8(c). Although the administrative law judge

gave the opinion of Dr. Schwartz that x-ray evidence of lung

scarring did not contribute in any way to claimant’s level of

impairment compelling weight, this opinion is relevant to the

contribution element of Section 8(0. rather than to the existence

of a pre-existing disability. The administrative law judge,

however, also found that Dr. Reid, the Newport News clinic

physician, whose opinion Norfolk maintains establishes a pre-

existing serious condition, failed to reconcile Dr. Can’s opinion

that the noted scarring represented “no acute cardiopulmonary

abnormality,” NSC Ex. 8(c), with his statement that the x-ray

demonstrated a permanent and serious pre-existing condition.

NSC Ex. 8(d). The administrative law judge also noted that

there was no evidence that Dr. Reid was Board-eligible in

_ pulmonary medicine. The administrative law judge thus

essentially discredited Dr. Reid’s opinion based on his lack of

expertise and because the administrative law judge did not find

it well-reasoned, Accordingly, we affirm the administrative law

judge’s finding that Norfolk failed to establish that claimant had

a pre-existing permanent partial disability.

Norfolk next argues that the administrative law judge

erred in applying the Luccitelli rule to find that mesothelioma

alone caused claimant’s permanent total disability, as

mesothelioma is a fatal disease which always results in disability

and death, thus undermining the Congressional intent of Section

8(1). We reject Norfolk’s assertion, as the statute requires that

the ultimate disability not be solely due to the last injury, and we

affirm the administrative law judge’s determination that

Norfolk has failed to show that claimant’s mesothelioma alone

would not have caused permanent total disability. “Where a

subsequent injury and its effects are alone sufficient to cause

permanent total disability the mere presence of’ a pre-existing

disability will not warrant contribution from the speci. fund,”

Director, OWCP v. Newport News Shipbuilding & Dry Dock

Co. [Carmines], 138 F.3d 134, 143, 32 BRBS 48, 55 (CRT)

(4th Cir, 1998), citing John T Clark & Son of Maryland, Inc. v.

BRB, 621 F.2d 93, 95 & n.2 (4th Cir. 1980). Contrary to

Norfolk’s contention, it was within the administrative law

judge’s discretion to give the opinion of Dr. Reid that claimant’s

lung scarring materially and substantially contributed to his

condition little, if any, weight both because Dr. Reid is not

pulmonary specialist and as he appears to characterize

claimant’s mesothelioma us being in his lungs rather than his

abdomen, whereas virtually all other physicians found

abdominal mesothelioma with no pleural involvement.'? Thus,

as the administrative law judge’s determination that employer

failed to establish the contribution element necessary for Section

8(f) relief is supported by the record, we affirm that finding and

consequently his denial of Section 8(f) relief in this case.'* See

'° Dr Reid’s opinion is, in any case, relevant to the

standard for establishing entitlement to Section 8(F) relief in the

case of permanent partial, rather than permanent total, disability.

See Director, OWCP v. Newport News Shipbuilding & Dry Dock

Co. [Carmines], 138 F.3d 134,32 BRBS 48 (CRT) (4t% Cir.

1998). Moreover, as Director notes, contrary to Novfolk’s

assertion, in Director, OWCF v. Newport News Shipbuilding &

Dry Dock Co. [Harcum 11], 131 F.3d 1079,31 BRBS 164

(CRT)(4th Cir. 1997), the Fourth Circuit did not preclude the

application of the “but for” test; rather it concluded that it was

not applicable in cases ‘of permanent partial disability.

'* Norfolk’s contention that the administrative law judge

erred in applying the “but for’ test in this ease is not dispositive.

Norfolk is referring to the test devised by some circuits which

requires that an employer prove entitlement to Section 8(f) relief

by showing that “but for” the pre&existing disability, the

claimant would be employable. See Director, OWC.P v. Jaffe

generally Cordero, 580 F.2d at 1331, 8 BRBS at 744.

Accordingly, the administrative law judge’s Decision

and Order is affirmed.

SO ORDERED.

BETTY JEAN HALL, Chief

Administrative Appeals Judge

ROY P. SMITH

New York Decorating, 25 F.3d 1080, 28 BRBS 30 (CRT)(D.C.

Cir. 1994); CNA Ins. Co. v. Legrow, 935 F.2d 430, 202 (CRT)

(1st CiR. 1991). As employer states, the Courts of Appeals have

phrased employers burden of proof using either “not due solely”

terminology or “but for” terminology. In Dominey, the Board

held that the “but for” test is merely a variation of the standard

used by Courts of Appeals having the same implications; a

claimant’s total disability must have been caused by both the

work injury and pre-existing condition. 30 BRBS at 137. In this

case, the administrative law judge, after weighing the medical

evidence of record, reasonably relied on the medical opinions

that claimant was permanently totally disabled due to his

asbestos-related mesothelioma alone. His finding that claimant’s

mesothelioma is alone permanently totally disabling is supported

by substantial evidence, and therefore under either test, employer

has not proven entitlement to Section 8(f) relief.

Administrative Appeals Judge

JAMES F. BROWN

Administrative Appeals Judge

CERTIFICATE OF SERVICE

98-1128 Theodore R. Faulk v. Newport News

Shipbuilding and Drydock Company, Norfolk

Shipbuilding and Drydock Corporation (Case

No. 97-LHCA-1216) (OWCP No. 05-0100463),

05-0100464)

I certify that the parties below were served this day.

DATE

Thomas O. Shepherd, Jr.

Clerk of the Board

Gary R. West, Esq.

Patten, Wornom and Watkins

12350 Jefferson Avenue

Suite 360

NEWPORT NEWS, VA 23602

—Certified

Benjamin M. Mason, Esq.

Mason & Mason, P.C.

11742 Jefferson Avenue

Suite 260

NEWPORT NEWS, VA 23606

—Certified

Ms. Carol A. DeDeo, Esq.

Associate Solicitor

U.S. Department of Labor

200 Constitution Avenue, N.W.

Suite S-4325

WASHINGTON, D.C. 20210

—Certified

Theodore R. Faulk

P.O. Box 5102

PORTSMOUTH, VA 23703

—Certified

Gerard E.W. Voyer, Esq.

Taylor & Walker, P.C.

555 Main Street

P.O. Box 3490

1300 First Virginia Tower

Norfolk, Virginia 23514-3490

Mr. B.E. Voultsides

District Director

OWCP-Longshore Division

200 Granby Mall

Room 212, Federal Building

NORFOLK, VA 23510

Judge Daniel A. Sarno, Jr.

U.S. Department of Labor

Office of Administrative Law Judge

603 Pilot House Drive

Suite 300, Commerce Plaza

NEWPORT NEWS, VA 23606

U.S. Department of Labor

Office of Administrative Law Judges

111 Veterans Memorial Blvd.

Suite 530

METAIRIE, LA 70005

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